Benefits Of Availing a Term Insurance in The Initial Stage of Your Life

Benefits Of Availing a Term Insurance in The Initial Stage of Your Life

Life is filled with uncertainties. A critical illness or serious accident can impact your family’s financial stability. However, if you begin investing your funds in a term plan i.e., an insurance plan, then protecting the family’s financial future would become much simpler. A life insurance scheme serves as a saviour that safeguards your family members against unfortunate happenings. A term plan is considered the purest kind of life insurance policy. It not only ensures the financial stability and security of your family but even provides a choice to safeguard them against any critical disease like heart illnesses, cancer, etc. However, before you zero in on any term plan, ensure to consider a term plan compare approach. Doing so allows you to select the best term plan as per your potential and preference. 

In life, you tend to come across several stages and in every stage, you require meeting distinct life goals and plans. Such financial goals involve huge expenses towards your marriage, child, retirement, parent’s health treatment, etc. Thus, it is crucial for you to plan out your financial goals from before as this helps you to attain them. Likewise, the financial liabilities of an individual aren’t similar, as they differ at distinct life stages. Thus, you must ensure to select your term plan cover accordingly. 

To understand better, mentioned here are some examples that will assist you in determining why term policy is crucial at every life stage – 

At a young age 

When you begin your work career early in life, you hold limited responsibilities and liabilities. Thus, at this phase, purchasing a term plan is a prudent choice you must make. Doing so would assist you get a bigger cover at a small premium. The best part is when it comes to term policy the amount you pay as a premium towards term insurance does not enhance with age and remains locked for the whole policy duration. Also, at a young age, you are less susceptible to serious diseases like cancer, heart issues, kidney issues, etc., and so your term policy premiums are considerably lesser. This is because insurance institutions believe at this age, you have lesser chance of developing any chronic diseases. 

When married

Newlyweds generally prefer purchasing policy insurance to offer income protection for their surviving partner. For a newlywed, purchasing a term policy is a prudent choice to make. As early as you begin your new married life, ensure to purchase a sufficient term cover to protect your spouse against increasing liabilities as such liabilities can fall upon your partner if anything happens to you. 

Keeping such scenarios in mind, it is a prudent choice, to begin with a term plan. Beginning a new life along with your spouse and making periodic investments like purchasing a 4-wheeler, a new home, etc. require a massive amount of funds. Thus, with the increase in liabilities, it is crucial for you to make sure that you hold sufficient cover that safeguards your family members financially in the case of your unfortunate demise. 

When you turn parents

The joy of turning into parents cannot be delineated in words. From providing child with a top-class higher education to an impressive lifestyle, it is the dream of every parent to ensure that their ward continues to reside a good life, even when they aren’t around. Thus, many parents nowadays have begun investing in various financial options to ensure that their ward’s future is secure and safe. The claim amount on the term insurance policy can be utilised for meeting your ward’s higher education requirements and even help in covering their long-term needs.

So, it is best to purchase a term insurance policy if you have family members who are financially dependent on you. Note that when purchasing term insurance, you must not go by the premium amount. Also, you must look for other important things like the insurance company’s reputation, market share, claim settlement, etc. 

So, in the entirety, the above are a few of the important life stages you must consider when you are looking to purchase an insurance cover. If you love and have affection for your family members and do not want them to witness any financial issues, then it is recommended that you to purchase adequate financial protection in the form of a term plan. So, whether you are married, single or retired, always make sure your family members are financially secure and stable on any unanticipated occasion so that they can reside a stress-free and financially secure life. 

Here are some of the important reasons why you must purchase a term insurance plan early – 

Reason 1 – The premium amount for the term insurance is low – 

This is one of the major benefits of purchasing a term life insurance policy early. As you become older, the premium amount for term policies enhance significantly. Suppose you want to purchase a term insurance plan equaling Rs 1 crore that comes with a cover of 75 years. Here, in this case the annual premium that you may have to pay will be around Rs 6,000 at the age of 25. However, if you opt for the same insurance at the age of 45, you will require shelling out an amount of Rs 30,000 as an annual premium amount. 

Term Policy Annual Premium at Distinct Life Stages
Life Cover Starting Age Premium Amount
Rs 1 crore 25 Rs 8,000
Rs 1 crore 30  Rs 10,000
Rs 1 crore 35 Rs 15,000
Rs 1 crore 40 Rs 20,000
Rs 1 crore 45 Rs 30,000

At a very young age you hold fewer responsibilities and are healthy, insurance institutions consider this parameter while determining the term policy premium. 

Reason 2 – As premium funds are locked in a lifetime; you pay way lesser in totality – 

Once you purchase a term policy, the premium is locked in for a lifetime i.e., it stays the same across the policy terms. Hence, purchasing it early infers savings of a big sum over a time period. 

For instance, for term insurance cover equaling Rs 1 crore until 75 years, a 25-year individual requires paying an annual premium equaling Rs 8,000 i.e., he must shell out an amount equaling Rs 4 lakh in upcoming 50 years. In the meanwhile, for the same insurance policy, a 35-year-old would require bearing Rs 15,000 every year i.e., Rs 6 lakh in total over the years. So, the individual would require shelling out an additional Rs 2 lakh for the same insurance policy if he purchases it at the age of 35 instead of 25.   

Reason 3 – Get tax deductions from the starting years of your work career

So, by opting for term insurance, you save a portion of your income tax slab, which otherwise would have gone towards paying taxes. So, while the basic reason for purchasing a term policy is to make sure your family members get full coverage, it even comes with tax benefits. Tax deduction on a term insurance policy is allowed as per Section 80 C of an amount of up to Rs 1.50 lakh.


Shankar is a tech blogger who occasionally enjoys penning historical fiction. With over a thousand articles written on tech, business, finance, marketing, mobile, social media, cloud storage, software, and general topics, he has been creating material for the past eight years.